Source: The Heroes

According to recent reports, several online retailing sites like Amazon, eBay, Alibaba and Etsy may block the Australia-based users if the controversial online GST changes go ahead. The Australian consumers could directly be affected and blocked from purchasing products from overseas on Etsy, eBay, Alibaba and Amazon if the government gives its assent for the controversial online GST changes.

We are left with unfavorable options: Etsy representative

To collect GST on all products sold, including purchases done under the existing low-value threshold of $1000, the overseas businesses with a yearly turnover of $75,000 or more will be required to register with the AT, according to new laws that are scheduled to come into effect from July 1.

On Friday, while giving proper evidence before a Senate economics committee in Melbourne, the representatives for Alibaba, Etsy and eBay hit out at the vendor collection model of the government that would place the burden of tax collection on the online retailing sites.

When questioned by senators, the company representatives confirmed that if the bill went through in its existing form, the Australian consumers could be geo-blocked. Angela Steen, Etsy public policy spokeswoman, said “Quite honestly we’re left with a number of unfavorable options, and [denying access] is our absolute worst-case scenario.”

The proposed legislation was “designed to close out loopholes that multinationals and big business are using to avoid paying Australian tax,” said Treasurer Scott Morrison. He added in his statement that “it creates a fairer tax system for Australians and supports Australian small businesses by creating a level playing field against foreign competitors.”

We have no other choice: Online retailing companies

Steen added “Blocking stay-at-home mums from being able to achieve a sale is frankly devastating for us and our business model.” The “preliminary” assessment of the bill by the China-based online retailing giant was that it may not be able to be applied to Ali Express, said James Hudson, director government relations at Alibaba.

He further said, “If that’s the case we would have no choice but to geoblock Australian users from using the platform.” Platforms like the Chinese e-commerce company were not able to navigate the range of GST exemptions, like for educational materials and also “floated a possible compliance levy on Australian importers,” said Hudson.

Even if the time frame was increased, the online retailing company would likely not comply, said Jooman Park, vice president and managing director for eBay New Zealand and Australia. He said, “It is a huge, global business risk.”